Pacific Aerospace & Electronics completes exchange

New York, March 27 - Pacific Aerospace & Electronics, Inc. said it completed its exchange of all its 11¼% senior subordinated notes.

The Wenatchee, Wash. manufacturer of metal and ceramic components said it issued new senior subordinated notes, preferred stock and common stock to noteholders and canceled the old notes.

Pacific Aerospace had been in default on the notes because it failed to make the last two interest payments.

Noteholders exchanged $63.7 million principal amount of the old notes for common stock and new preferred stock giving them 97.5% of the voting power of the company and $15 million principal amount of 10% pay-in-kind senior subordinated notes.

The new preferred stock converts into common stock on shareholder approval of an increase in the number of authorized shares of common stock.

Pacific Aerospace also obtained a new five-year senior secured loan with a $36 million principal amount. The loan was issued at a discount for net proceeds of $22 million. Interest is 5%.

Proceeds from the loan were used to pay off the company's 21% senior secured loan, for working capital, to pay fees and costs of restructuring and for general corporate purposes.

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